Slowdown Attributable To A National Softening In Demand
Some housing bubble news from Wall Street and Washington. Bloomberg, “Toll Brothers Inc., the largest U.S. luxury homebuilder, said third-quarter profit fell 85 percent as the deepening housing slump cut sales, increased cancellations and forced the company to write down property. Cancellations jumped to 24 percent in the quarter and CEO Robert Toll said a glut of homes is curbing demand.”
“Toll said today the housing market hasn’t stabilized. ‘We continue to wrestle with the interrelated challenges of softer demand and excess housing supply in most markets,’ Robert Toll said in the statement.”
“While the company has been helped during the downturn by building homes only when an order is received, ‘we have experienced a much higher rate of cancellations than at any time in our 21 year history as a public company,’ Toll said.”
“Profit included a pretax writedown of $147.3 million for land, developments and options.”
“Five of the largest U.S. homebuilders reported combined losses of $1.85 billion and took charges of $2.9 billion to write down land values and walk away from property options in their most recent quarters.”
The Street.com. “‘We, along with many others, are concerned about the dislocation in the secondary mortgage market,’ said CEO Bob Toll. ‘Tightening credit standards will likely shrink the pool of potential home buyers: Mortgage market liquidity issues and higher borrowing rates may impede some customers from closing, while others may find it more difficult to sell their existing homes.’”
From MarketWatch. “WCI Communities, the Bonita Springs, Fla.-based builder of multi-family houses, high rises and retirement homes, said it swung to a second-quarter loss of $33.2 million.”
“‘We believe the slowdown in new unit orders is attributable to a national softening in demand for new homes as well as an oversupply of homes available for sale, particularly in our Florida market,’ WCI said, adding it has ‘little or no visibility on when market conditions are likely to improve.’”
“‘WCI continued to focus on reducing costs and generating cash flow in the second quarter,’ said Jerry Starkey, CEO of WCI Communities.”
“For the three months ended June 30, 2007, the aggregate value of Traditional and Tower Homebuilding net orders fell 96.2% over the same period a year ago to $9.1 million, while the number of unit orders declined 82.6% to 50.”
“For the second quarter of 2007, the number of gross and net orders declined 43.4% and 57.4%, respectively….The cancellation rate for the second quarter of 2007 was 47.8%, up from 19.7% in the first quarter of the year. Cancellations during the quarter totaled 98.”
“For the three months ended June 30, 2007, revenues in the Tower Homebuilding Division decreased 99.0% to $2.1 million from $214.4 million for the same period a year ago, primarily due to the reversal of revenue during the quarter related to reserved tower defaults as well as less progression of building percentage of completion among the towers under construction.”
The Associated Press. “Accredited Home Lenders Holding Co. will slash its work force by more than half and stop accepting new mortgage applications in the U.S. as it struggles to survive in the troubled home lending industry, the company said Wednesday.”
“‘These difficult decisions were made out of necessity in light of the continued and widely publicized turbulence in the mortgage and financial markets’ James A. Konrath, CEO, said in a prepared statement.”
“In Arizona, Scottsdale-based 1st National Bank Holding Co. said it would close its wholesale mortgage unit and mortgage centers in Virginia, North Carolina and Nevada. The company said it…will lay off 541 workers.”
“‘I have never seen a market shift as drastically as has occurred in the mortgage business over the last four months, but even more precipitous in the last few weeks,’ owner and Chairman Raymond Lamb said in a statement.”
From Reuters. “First Magnus Financial Corporation, one of the largest independent American mortgage lenders, filed for Chapter 11 bankruptcy protection yesterday, becoming the latest provider of home loans to collapse as the housing market slumps.”
“With plans to sell-off its Option One subprime mortgage business already set, H&R Block Inc. said Wednesday it has used $1.05 billion in credit lines to fortify operations.”
“‘In recent weeks, the credit markets have become increasingly constrained and unstable,’ William Trubeck, H&R Block’s chief financial officer, said.”
“H&R Block’s access to cash may be pinched because markets for its commercial paper and subprime mortgages offered by the Option One unit are at a near-standstill.”
“While Cerberus Capital Management LP has agreed to buy Option One, the sale may be delayed from October to December. Hedge fund manager Richard Breeden is pressing H&R Block to ’stop the bleeding’ and shut the money-losing unit.”
“HSBC Holdings Plc, Europe’s biggest bank by market value, will eliminate 600 U.S. jobs and close a mortgage office as it retreats from the subprime home loans that have triggered a rise in defaults.”
“The London-based bank will close the mortgage-services office in Carmel, Indiana, by June 30, 2008, spokesman Michael Trevino said in an interview today. HSBC employs 60,000 people in the U.S., Trevino said.”
“‘It’s about matching capacity with business volumes,’ he said. ‘It’s about fat.’”
From Thisismoney. “HSBC Lloyds TSB and others are affected by the latest twist in the global credit crisis that has seen the funding for vehicles that drive their day-to-day operations dry up on the soaring cost of credit.”
“UK’s biggest mortgage lender HBOS admitted last night it had been forced to lend £310m to finance Grampian, its credit investment vehicle, and its rivals may be forced to follow suit. Grampian had $35.4bn in debt outstanding as of the end of May, according to Moody’s Investors Service, making it the biggest issuer of assetbacked commercial paper in Europe.”
“Reduced interbank lending may become a problem for Germany’s banks if it persists and may require central bank intervention, the head of the eastern German savings bank association said on Wednesday.”
“‘We’ve got assets that are not very moveable for the moment. If it stays like that for long, it will become problematic,’ Claus Friedrich Holtmann told a news conference.”
“The comments echo those on Tuesday by state-backed lender WestLB’s CEO Alexander Stuhlmann, who said Germany’s banks faced a ‘not uncritical situation,’ with foreign banks becoming less willing to extend credit lines to them.”
“From the looks of things at the newly built Aparta Hotel Residencia, you’d never know that it’s the high summer tourist season in Canet d’En Berenguer, a town of 5,000 just north of Valencia on Spain’s Mediterranean coast.”
“The compound’s 308 apartments, completed this spring, are all unoccupied. Grass has started to sprout between the red terra-cotta tiles.”
“The residence is just one of a trail of buildings dotting the sandy coastline constructed by Enrique Banuelos as he amassed a fortune of more than 4 billion euros ($5.4 billion) over the past 15 years. Banuelos lost much of that money, and shareholders’, as the stock market punished the firm he founded, Astroc Mediterraneo SA, amid a rapid cooling of Spain’s housing market.”
“Meanwhile, about 700,000 new housing units will go on sale across Spain this year, 300,000 more than projected demand, says Fernando Rodriguez de Acuna, president of R. R. de Acuna & Asociados.”
“‘There are about 60,000 real estate firms in Spain, and 75 percent of them are disasters that will vanish,’ Rodriguez de Acuna says.”
“Tightening global credit markets have taken a toll on U.S. mortgage-backed securities issued by Fannie Mae and Freddie Mac and it will take more than recent Federal Reserve measures to boost liquidity.”
“While the central bank’s recent move to cut the primary discount rate boosted liquidity in financial markets overall, it may be too late to help the roughly $4.25 trillion ‘agency’ MBS market.”
“At roughly $7 trillion in size, which includes the subprime sector, the mortgage bond market is the world’s largest, dominated by Fannie Mae and Freddie Mac.”
“‘Liquidity in the agency MBS market is not only worse than it was a few months ago, it is worse than it was a just a few weeks ago,’ said Arthur Frank, director and head of MBS research at Deutsche Bank Securities in New York.”
“Alec Crawford, head of MBS strategy at RBS Greenwich Capital, said there have recently been large differences between quotes on prices to buy and prices to sell agency MBS, indicative of a lack of liquidity.”
“‘The bid/ask spreads on mortgage bonds have certainly widened because the Street knows that a $300 million trade today is similar in risk to a billion dollar trade six months ago and that’s because there’s so much more volatility,’ he said.”
“FBR Research said on Wednesday that $150 billion to $250 billion of permanent capital is needed to normalize pricing in the depressed market for mortgage-backed securities.”
“However, in a note to clients, the research arm of securities firm Friedman, Billings, Ramsey & Co Inc said the process would take up to a year and will be painful for mortgage investors and originators. FBR Research said the new capital is needed to compensate for the massive ‘deleveraging’ underway among companies that hold mortgages.”
“More than $20 billion worth of mortgage bonds not backed by mortgage finance companies Fannie Mae and Freddie Mac have been offered for sale in the past few days.”
“Mortgage investors increasingly question the underlying value of mortgage-backed securities given that orginators’ lax lending standards which led to a jump in defaults. Also, many economists expect weak home prices to drop further.”
“‘Investors believe the collateral has been impaired since they expect home prices to decline materially over the next year,’ the note said.”
“The Federal Reserve’s attempts to provide liquidity in the past few days are not reaching the players who need it since they cannot borrow directly from the central bank, leaving the $7.2 trillion U.S. mortgage bond market struggling to clear the volumes being offered.”
“Losses emanating from the U.S. subprime mortgage market have hit the balance sheets of banks and funds around the world in recent weeks and created the worst credit and liquidity squeeze in world financial markets in a decade.”
“‘The Fed is spraying the fire but it’s hitting the houses around the fire,’ said Michael Youngblood, a managing director at FBR Investment Management.”
“On Monday, one list of more than $500 million non-agency adjustable-rate mortgages drew offers as low as 93.5 cents on the dollar, Youngblood said.”
“The problem for many lenders is that they rely on private funding sources and cannot borrow directly from the Fed, and so are being forced to sell assets to raise cash, analysts said. ‘This flood of supply will pressure all sectors of the mortgage market, as investors and dealers are forced to sell other assets to absorb those,’ JPMorgan said in a note.”
“Two European mortgage-backed securities funds had their ratings slashed to junk from AAA by Standard & Poor’s after investors refused to provide short-term financing as the fallout from the U.S. subprime slump spreads.”
“Investors including Bill Gross, chief investment officer at Pacific Investment Management Co., have criticized ratings firms for failing to accurately value collateral backing the debt and waiting too long to cut rankings.”
“‘With the benefit of hindsight, the agencies clearly got it significantly wrong,’ said Mark Bowles, who oversees $10 billion of asset-backed securities at UniCredit SpA in London. ‘But we are in market conditions that nobody could have foreseen.’”
He is a desperate seller in Sarasota.
Anyone want to buy?
http://condosaleinflorida.com/
That’s a classy place. They have LION statues by the entryway!
Gee, how about a pic of the UNIT??? Jerkoffs. I’d give $65,500 for it ($50 sf).
Wow. Throw in a couple of gargoyles and you are rolling with that pad.
You might be able to get the seller to bring gargoyles to the table.
Leave his wife and kid out of it.
If they want the place sold they are going to have to sacrifice.
Lay me down! The master B/R is a humongous 12×12. That’s the size of the kiddie B/Rs for an average home in Texas, course everything’s bigger in Texas….
I do not count any bedroom under 12×12 (mayber 12×10) as a bedroom, regardless of what the realtors call the room. My children each have a 14×17 bedroom. The wife & I have the largest bedroom. Of course, they built them bigger herein Ohio back in 1872!
“I do not count any bedroom under 12×12 (maybe 12×10) as a bedroom, regardless of what the realtor’s call the room. My children each have a 14×17 bedroom.”
Yup, those are dinky size rooms. Still, huge houses/rooms have to be heated and cooled, and with energy costs headed ever skyward, big isn’t always better, even if most American consumers are identified throughout the rest of the world as obese consumers of oversize trucks, oversize meals, oversize waistlines, and oversize egos. Perhaps we’ve been long overdue for a good spanking-down before we’re forced to really cry from our own stupidity in a world of diminishing resources.
“the rest of the world” - mostly wants to come to the USA - now I know why !
The USA was the home of the small house movement for many years. This is why there are so many cottages with tiny rooms. Such structures are extremely efficient not only to construct and keep up, but also result in compact and efficient communities.
I have a 9 x 10 “bedroom” that I use as a spare. The double bed eats up the entire room. There’s only a few feet to get around it.
The typical non-master bedrooms (10 x 10 or smaller) are only good for becoming a storage closet. In all the new builds we viewed, I was only interested in the place if these dinky room were side by side so I could tear down a wall to make them liveable.
There is a place here in Davis that says it has 8 bedrooms for rent. What the owners did was make every inch of the place that wasn’t a hallway, bathroom or kitchen into bedrooms including turning the master into 2 rooms, same with the garage. I wouldn’t keep gerbils in spaces that small.
Even in little old Ohio the kids bedrooms are 12 x 12. He’s to to be joking.
IIRC, those units are off Tuttle, not far from the edge of Newtown. I think they might be conversions, but not sure. $50 a sq ft sounds about right.
A similar property is going for $243k.
http://homes.realtor.com/prop/1087179352
Estimated payments are $1,199 a month not counting taxes, hoas or insurance. With all that, you are paying 2 grand a month and THAT IS WITH 20% down just live in some condo conversion.
Anyone bringing $48 grand to the table?
My offer for all of it just went down to $48K.
From the condo ad:
“…while enjoying beautiful palms blowing just off your back balcony.”
Is he referring to the hurricane season?
“‘There are about 60,000 real estate firms in Spain, and 75 percent of them are disasters that will vanish,’ Rodriguez de Acuna says.”
“and then it went dark.”
Caught my eye too. Wow, there’s gonna be a HELL of a lot of unemployment.
How many days do the Spaniards get for “Holiday”
They are not unemployed they are on permanent holiday. They too can keep their unemployment numbers artificially low.
“How many days do the Spaniards get for “Holiday” ”
Many will now get 365 a year!
Does Spain get to have a leap year?
I think Spain has about 30 million people (or it used to). So 1 in 500 Spaniards has his or her own RE firm. Having lived in Spain for a year, I will venture that Spaniards on the whole are possibly more delusional than Americans.
There were approximately 460,000 Realtors in the US in 2004 (probably another 50K in 2005 & 2006). I suspect half of these Realtors are unemployed (unemployable?), but will never show up in the labor stats. The stores will feel the difference as will the food pantries.
“On Monday, one list of more than $500 million non-agency adjustable-rate mortgages drew offers as low as 93.5 cents on the dollar, Youngblood said.”
-6.5%…..what’s the problem?
That’s what I thought…seems like bids would be a lot lower.
And the way that they worded it, “as low as” means to me that they got more. I’m confused as to why this is a problem, too.
Funds that were buying these securities were leveraged 6:1, If you recall the GS conference call. So this will translate into 56% loss of the investment capital. Once you loose 56% of your investment you are not likely to touch that investment ever again in your life, so no liquidity
If they think that’s bad just wait’l the property serving as collateral get’s revalued to 35-50% of current price.
“‘With the benefit of hindsight, the agencies clearly got it significantly wrong,’ said Mark Bowles, who oversees $10 billion of asset-backed securities at UniCredit SpA in London. ‘But we are in market conditions that nobody could have foreseen.’”
I guess I’m noboby, because I did foresee this…
I wouldn’t let this Bowles moron balance my checkbook, let alone manage 10B in ABS.
Someone throw up that quote from Upton Sinclair again.
“It is difficult to get a man to understand something when his job depends on not understanding it.”
Testify, slowburn. Anyone who puts so much as a penny in his fund deserves to lose it. The guy’s got $10 bil under management. Whew! That’s a lot to entrust to an idiot.
“Mortgage market liquidity issues and higher borrowing rates may impede some customers from closing, while others may find it more difficult to sell their existing homes.”
When did Toll start reading this blog?
He’s been here a long time, only with an “r” added to his name.
Does Bob Toll spell his first name with one or 2 “o’s”?
“‘With the benefit of hindsight, the agencies clearly got it significantly wrong,’ said Mark Bowles, who oversees $10 billion of asset-backed securities at UniCredit SpA in London. ‘But we are in market conditions that nobody could have foreseen.’”
You oversee 10 billion in assets and you couldn’t see this coming?
If you didn’t see this bubble then you shouldn’t be managing anyones money. What a joke.
“….their ratings slashed to junk from AAA by Standard & Poor’s…”
Wow, I did not realize you could fall of the ratings cliff so fast. I recall it taking years for Rite Aid to get downgraded a half a step at a time. First, the negative watch at A+, then the downgrade to A with a neutral stance…..then another negative watch…etc., etc., etc.
To go from AAA to less than BBB in one swoop…..ouch
Yeah…I forsaw this coming too.
Remove the Funny Money Grease from the Flying Pigs and they CRASH every time
Here’s a suggestion for a topic….as the mortgage mess gets uglier by the day, where are HBB’ers comfortable parking their cash? FDIC insurance could be worthless. There are some great yields offered by money market funds, but who knows what their exposure is and how safe those deposits are.
Thoughts?
HBB’ers comfortable parking their cash?
http://www.mypillow.com
Whoa, whoa, whoa. MMF’s put their eggs in MBS baskets, too.
Here’s the connection.
“The $1.1 trillion market for commercial paper used to buy assets from mortgages to car loans has seized up just as more than half of that amount comes due in the next 90 days, according to the Federal Reserve. Unless they find new buyers, hundreds of hedge funds and home-loan companies will be forced to sell $75 billion of debt, according to Zurich-based UBS AG, Europe’s largest bank.
Those sales would drive down prices in a market where investors have already lost $44 billion, based on Merrill Lynch & Co.’s broadest index of floating-rate securities backed by home- equity loans. That may hurt the 38.4 million individual and institutional investors in money market funds, the biggest owners of commercial paper. ”
Treasury money market fund. If the credit crunch turns out to be nothing, you can move $$ back into stocks or mutual funds in six to nine months and you’ve lost maybe a few percent gains.
Or you can ‘roll your own’ MM fund by buying US and foreign (not dollar denominated) treasury bonds with 1 year maturity, or else notes with under a year maturity. Cut out the middleman.
Try actual paper money taken from the Bank and placed quietly under the mattress. Started to do this bit by bit by bit for the very first time in my life and it really feels better than bad. One can always put the dough back in the bank at anytime.
Cash and near-cash equivalents. Foreign currency, particularly Aussie Dollar, Pound, Euro, and Canadian Dollar.
Read about First Magnus travesty last night in the local AZ newspaper. Plenty of employee comments also. The fact that a company of that size lies to it’s workers right up to the day before bankruptcy filing AND not paying them for work completed just makes the rest of the nations workforce jaded & cynical about their occupations.
Corporations whine about finding good employees then pull this stunt? Over and over it happens. No wonder people have zero loyalty to their companies.
And instead of ostrasizing the exec offenders by not re-employing ‘em later, the other companies admire them for their scorched earth tactics, like how ex-Home Depot Nardelli landed another CEO job at Chrysler!!
JEEZUZ EFFIN CHRIST - a CEO who was hated & ran the company into the ground (been to a home depot lately?), exited with a huge undeserved severence package, then winds up employed AGAIN in the came capacity.
Oh sorry, to mitigate the critsizm he agreed to a salary of only $1.00. Well gosh that makes all the history disappear since he’s working so cheap. Yeah, Wall Street looks after their own, without a doubt. Good ol boy network.
I WAS possibly going to buy a new Dodge Challenger but have serious reservations now that this person is running the company.
rant/comment off
Prof bear or txchic…what was the name of that guy that offed Sunbeam to Mexico…”hacksaw steve”
“It is truly enough said that a corporation has no conscience; but a corporation of conscientious men is a corporation with a conscience”
Thoreau… circa 1849
http://thoreau.eserver.org/civil1.html
Civil Disobedience is an essay by Henry David Thoreau that was first published in 1849. It argues that people should not permit governments to overrule or atrophy their consciences, and that people have a duty to avoid allowing such acquiescence to enable the government to make them the agents of injustice.
The guy who offered up Sunbeam was Chainsaw Al Dunlap.
And the employee comments just keep on coming! See the dirt on First Magnus at:
http://regulus2.azstarnet.com/comments/index.php?id=197618
More venom can be found at:
http://www.tucsoncitizen.com/ss/frontpage/60794.php
Folks, it’s hot in Tucson. And I’m not just talking about the weather.
Let those bloodsuckers rot while they flip burgers at MickieD’s.
IMO the only decent American cars you can buy today have different badges on them, like Toyota, Honda, and Nissan, which are now for our market mostly built in Ohio, Tennessee, Texas, Kentucky, etc. The fact of the matter is, most “American” cars are actually built in Canada and Mexico. So, I guess they are still American, just not USA. I’m sure he’ll fit right in with an “American” car company. BTW, you know that Daimler couldn’t wait to get rid of Chrysler, right?
An article in WSJ a few weeks ago stated Detroit has closed 30 plants in North America in the last ?? years (don’t recall the number). In the same time period, foreign manufacturers opened 24 new plants in North America.
It is about benefits to retired workers. “American” companies are union and have to pay pension and medical for retired workers.
“Foreign” brands that open factories here are non-usnion. They pay the same salaries, but no pensions or medical to retirees…..
And that makes ALL the difference.
Aqius, you said everything I wanted to say…
“‘There are about 60,000 real estate firms in Spain, and 75 percent of them are disasters that will vanish,’ Rodriguez de Acuna says.”
Scanned this Bloomberg article earlier. If you think we’ve got problems here in the US, read this article.
This is why I disagree when I hear of people (okay, Schiff) saying the dollar will crash in relation to the Euro, and Europeans will come in and buy up everything here. He is focused on how bad it is here, without seeing it is even worse there. Everything I see says it will be A LOT worse there.
The dollar will crash, but the Euro and Pound will crash even harder. The Saudi’s and Chindia are already invested in dollars to fund our debt, so they can’t come in and buy as their holdings crash.
It is a global bubble.
What is the saying? First in makes the money, and first out keeps it. Are we first out of the global bubble, and set to jump in and buy everyone elses assets when they pass us on the way down?
I agree with your view on this. Oddly, that makes Schiff not bearish enough.
A treasure trove of downbeat news. And yet, the stock market ignores it and goes up.
They’re looking at “possible takeover activity” and “HOPES for a rate cut”. Setting themselves up for failure, again. Slightly different tunes were being sung by Dodd and Bernanke yesterday after the meeting. The market heard only what they wanted to, and it didn’t come from Bernanke. “La lalalalalala lalalalalala”
The stock market tries to look ahead by several months/years, and housing problems have largely been priced in by now. The US stock market has been stagnant versus the rest of the world since the dotcom meltdown began in 2001. Lots of money left stocks for housing between 2000 and 2003, partly causing the bubble.
If there are new bad suprises stocks will go down, otherwise the odds are they’ll be flat or continue up.
A good theory John and maybe correct, I am wary of any market that is being fueled by rumors of liquidity.
As opposed to TxChick and some other wonderful short term traders, I trade on fundamentals. The items I follow are 3 - 6 months down the road. The market, because it is made up of people with memory deficiencies, reacts to rumors. This is not healthy
I don’t claim to have inside knowledge but a very knowledgeable guy I know who does private financial work for BIG names is long (18 months) on equities. Based on rampant and understated inflation, I’m going stay long.
So our economy that was based solely on flipping houses will produce great stocks now that the game of flipping houses is dying? The fundamentals of this economy are a disaster. You are using somebody that does private financial work for BIG companies as your guide? It appears to me about 99% of those guys were wrong on the housing situation and merely rode the Goldilocks wave in the past year. You can go long. I’m keeping my seat on the bench.
Sorry, I disagree. How do you substantiate the claim that money left the stock market from 2000 to 2003 and was used for fuel in housing price runup? It is my contention that those who MIGHT have sold some tech stocks in 2000 (before the meltdown) probably invested in other tech stocks that looked even more attractive. And those who sold after the meltdown, well, what were they left with? Less than their original investment. I do not think that they, in any meaningful way, used that money to invest in housing. They needed to make some of their money back, and probably, again, put their money back in to stocks. This, I think is the reason that the DOW started it’s march upward again, though the NASDAQ stayed low, because many were wary of investing in that segment again. Furthermore, the reason that I think you may see a connection here is the simple fact that as the economy started to tank, Greenspan, knowing this, dropped interest rates to the floor. THIS is the reason that housing inflated. Even people who were unemployed because of tech, could have gotten a loan for a home. Those with NO assets, NO downpayment, NO job, NO scruples could get a loan because of the Fed derived interest in stimulating a tanking economy. And look where it got us, 5 years down the road, and we’re worse off than before. I also do NOT feel that the market looks that far ahead. IF they did, then they should have been able, despite what they may say, to see that this was coming, and price accordingly MONTHS AGO. NOT after all of these delinquencies and defaults are hitting the books. But no, stocks were hitting record highs months ago. What was this based on? The fact that totally fixed numbers from all offices of our government were fixed? (CPI, employment, etc). They are a completely reactionary group that get so caught up in rumors, that any little, tiny, insignificant piece of good news sends the indices up hundreds of points. There are no longer any fundamentals priced into the stock market, with PE ratios still running at all time highs, as many, many companies are reporting earnings declines all over the board. We ALL know that the American consumer is going to be hit, really, really hard, and that the balance sheets of every company serving the American consumer, are going to be hit very, very hard in the next several months / years. We discuss this on here every day, and we all know that it is NOT contained, that the contagion will spread across all regions, all demographics, and all sectors of industry. Saying that the stock market has “hit the bottom now” is akin to those that were saying that housing has hit bottom, when we clearly have a long way to go. I’m not trying to put words in anyone’s mouth, but come on, can you really be a cheerleader for the stock market? Can you really hear yourself when you say that? We are NOT in for a soft landing in housing, in stocks, in just about anything.
“The stock market tries to look ahead by several months/years, and housing problems have largely been priced in by now.”
The key here is the word ‘tries.’ My dog tries to eat everything in the house and still convince us he is starving. Most often he fails.
Based on the fact that we are in this problem of this magnitude shows that most Wall Street investors do not look ahead in time. Sure, there are many who try to figure out where the market is really heading. These are the ones who are now stuffing their money into treasuries. The rest look ahead to the next fee or bonus.
Since no one really knows the outcome of the credit crunch, can anyone say that the results are priced in? Is a 1000 point fall enough to take care of the damage that will be caused if this thing ends up where it’s heading? Not even close.
“Is a 1000 point fall enough to take care of the damage that will be caused if this thing ends up where it’s heading?”
Based on the past few days, a 1000 point fall seems to be enough. Glad the market had that correction to get rid of all the excess. Now we should be able to soon look forward to Dow 14,000 and an all-time new record in the next couple months. All is contained now.
Hehe, I sense your sarcasm.
“For the three months ended June 30, 2007, the aggregate value of Traditional and Tower Homebuilding net orders fell 96.2% over the same period a year ago to $9.1 million, while the number of unit orders declined 82.6% to 50.”
“For the three months ended June 30, 2007, revenues in the Tower Homebuilding Division decreased 99.0% to $2.1 million from $214.4 million for the same period a year ago”…….
If this isn’t a crash, I don’t know what is.
Oh my, did I read that right? Down 96%????
And revenues down 99%??
Crash is correct, at least for WCI.
This is incredible.
Bet their expenses didn’t drop that fast.
Oh, it’s coming.
Oh that is just a souffle’!!! On fire.
WCI’s decline in profit doesn’t even begin to address the severity of the problem. How about negative orders in the quarter? From the earnings release:
“Tower Homebuilding orders for the second quarter of 2007 were negative as the 68 defaults recorded during the quarter outnumbered 11 gross new orders. Finished units sold during the quarter totaled six.”
I’ll try Financial Fiascos for $1000.00, please…
“‘In recent weeks, the credit markets have become increasingly constrained and unstable,’ William Trubeck, H&R Block’s chief financial officer, said.”
What is a company in it’s death throes?
Correct, select again…
LOLOL!!!!!
“Alec Crawford, head of MBS strategy at RBS Greenwich Capital, said there have recently been large differences between quotes on prices to buy and prices to sell agency MBS, indicative of a lack of liquidity.”
Sounds like the housing market in general. Buyer is unwilling to part with (presumably) hard-earned cash on a risky asset, and seller is not “just going to give it away”. I wonder who has to feed the squirrels?
The FED feeds the squirrels since they held the collateral and the bank went belly up.
“Hedge fund manager Richard Breeden is pressing H&R Block to ’stop the bleeding’ and shut the money-losing unit.”
Didn’t this guy used to head or be part of the SEC??
Relax H&R Block…All bleeding is controllable…EVENTUALLY !
hee hee
That’s right, it’ll stop when you RUN OUT OF BLOOD.
Hey, Elton called and asked me to update some lyrics for him. I guess Bernie is on holiday
Video Performance
Hey kids, shake it loose together
The spotlight’s hitting something
That’s been known to screw the savers
We’ll kill the bloated bull tonight
So stick around
You’re gonna hear electric music
Solid walls of sound
Say, Jimmy and Larry, have you seen them yet
But they’re so freaked out, BuhBuhBuhBuh Bennie and the Feds
Oh but they’re loud and they’re powerful
Oh Bennie he’s really mean
Got Helicopter routes, investor’s suits
You know they’re working on the same old scheme
Ah choo, BuhBuh Bennie and the Feds
Hey kids, plug into the feckless
Maybe they’re busted
But Bennie makes them reckless
We shall survive, let us take ourselves along
Where we fight the banksters out in the streets
To find who’s short and who’s long
Say, Jimmy and Larry, have you seen them yet
Watch’in the banks go down; BuhBuhBuhBuh Bennie and the Feds
Ooh but they’re scared and they’re hungerful
Oh Bennie he’s really mean
Got bank bailout recruits, slide down the chute
You know I read it in a magazine
Ah ha, BuhBuh Bennie and the Feds
Say, Jimmy and Larry, have you seen them yet
Scream as their stocks go down, BuhBuhBuhBuh Bennie and the Feds
Oh but they’re loud and they’re powerful
Oh Bennie he’s really mean
He’s got the mortgage doom, the loan buffoons
You know they really make me wanna scream
Ah ha, BuhBuh Bennie and the Feds
Bennie, Bennie and the Feds
Bennie, Bennie, Bennie, Bennie, Bennie and the Feds
Bennie, Bennie, Bennie, Bennie, Bennie, Bennie and the Feds
[fade out...]
I was going to tackle that one eventually…
No need, great job!
“‘We, along with many others, are concerned about the dislocation in the secondary mortgage market,’ said CEO Bob Toll.
You should be concerned Bob Toll because your greed fueled by the greed of Wallstreet banks and investors along with greedy mortgage brokers and a NAR who mislead the public by stating house prices will always go up caused this mess. Nobody, including the political leaders should NOT bail out any of these entities and therefore let this mess run its course. That is the price of short term greed that these players will have to learn from experience!!!
First aid for a dislocation: Pop it back it, put it on ice, give a rest, let it heal.
It’ll take time and be quite painful. In any case, you won’t be using it for a while.
“…state-backed lender WestLB’s CEO Alexander Stuhlmann…said Germany’s banks faced a ‘not uncritical situation,’ with foreign banks becoming less willing to extend credit lines to them.”
Conclusion: German banks are not unscrewed.
Damn you again. lol.
Two negatives make a positive or is it two positivies make a negative?
“‘The Fed is spraying the fire but it’s hitting the houses around the fire,’ said Michael Youngblood, a managing director at FBR Investment Management.”
It’s more like they are blowing smoke . . .
Peeing on a forest fire.
Peeing into the wind.
“‘With the benefit of hindsight, the (ratings) agencies clearly got it significantly wrong,’
With the benefit of foresight, you would have seen it as well.
‘But we are in market conditions that nobody could have foreseen.’
Wrong. The credit ratings agencies *could* have foreseen this, had they taken into account the possibility of “negative HPA”, aka falling housing prices. None of this is “black swan” stuff, it’s all “grey pigeon” stuff had you been observant enough to look.
“But we are in market conditions nobody could have foreseen.”
I crashed into the car in front because I was driving ahead looking into the rear view mirror. Is this what the world has come to? Masters of the Universe making the sort of excuses a 10 year old would not even consider. What an imbecile!
He clearly graduated from the ‘Dog Ate My Homework’ School of Business.
“The compound’s 308 apartments, completed this spring, are all unoccupied. Grass has started to sprout between the red terra-cotta tiles.”
Ghost Town…
Euro-Style
“‘I have never seen a market shift as drastically as has occurred in the mortgage business over the last four months, but even more precipitous in the last few weeks,’ owner and Chairman Raymond Lamb said in a statement.”
Spoke to a FB facing imminent payment shock and hoping to refinance in the current lending environment.
LMAO! Sheeple are clueless.
Refinance into WHAT? Did nobody ask this question? Even with bubble lending, there isn’t anything to refinance into.
Another Neg-AM loan with low payments, don’t cha know. He can get the same payment and still never pay a penny in principal. That’s how banking works! Borrow money and never pay it back.
Those loans were here last year, why would they be gone now?
Can’t you just hear the mortgage broker: “Oh, don’t worry about the rate reset. Just come back in a couple of years and I’ll take care of you. We might even be able to get you more cash out! Won’t that be sweet.”
My broker was here last year, why is he gone now?
Bear Stearns just laid off 1200 people in closing their mortgage unit.
Link
http://bloomberg.com/apps/news?pid=20601087&sid=a_jFXHzh0PFc&refer=home
Tom,
Lehman, not Bear
….Lehman, led by Chief Executive Officer Richard Fuld, bought Irvine, California- based BNC in 2004….”
Sounds pretty Fulded up to me….wonder what they paid in 2004. That would almost be the top of the market….
Tom Lehman got the axe? I knew his career kind of fell off a cliff after winning the British back in 96… but getting into the mortgage biz?
How could he sink so low?
Jim Cramer must think we are all retarded. He is so condescending saying we are going to get to 14,500.
He also said last Friday would be the largest one day point gain in the Dow. I didn’t hear him apologize that time either.
Lehman Throws in Towel on BNC Mortgages, Fires 1,200
“Lehman Brothers Holdings Inc., the biggest underwriter of U.S. bonds backed by mortgages, became the first firm on Wall Street to close its subprime-lending unit and said 1,200 employees will lose their jobs.
Shuttering BNC Mortgage LLC will cut earnings by $52 million, Lehman said in a statement today. Lehman acquired Irvine, California-based BNC in 2004 and used it to expand in lending to homeowners with poor credit or heavy debt loads. The job cuts are equivalent to about 4.2 percent of Lehman’s workforce of more than 28,000. ” (per Bloomberg)
Yep, those lost jobs will get gobbled right up in the birth / death model.
“‘We believe the slowdown in new unit orders is attributable to a national softening in demand for new homes as well as an oversupply of homes available for sale, particularly in our Florida market,’ WCI said, adding it has ‘little or no visibility on when market conditions are likely to improve.’”
Gee I wonder who’s responsible for the “oversupply” of homes. These jerks sure don’t want to take any responsibility for this mess. It was builders greed, realtors greed, mortgage brokers greed, speculators & investors greed and yes, buyers greed. You can all pat yourselves on the back for a job well done of singlehandedly bringing down the economy of this country. Any one of these people who didn’t see this coming is an idiot and deserves whatever they get.
Mortgages Push Late Loans to 17-Year High, FDIC Says
http://bloomberg.com/apps/news?pid=20601087&sid=as2Ho_PwtqjM&refer=home
Builder in Spain Crashes, Founder Keeps New York Pad
http://bloomberg.com/apps/news?pid=20601109&sid=aTtIHezGXVeE&refer=home
Toll Brothers giving advice??? You already know this Toll Brothers but for people new to this housing crisis here is how it went during the ripoff times:
250 new houses for sale 250k to 350k , In came the investors who the builders knew very well and the sold them the first 10 homes in a week, and then filled up their board with red sold signs and told the real buyers that we have a pent up demand so you can pay 500k to 700k for the very same house and stand in line and take a number. I don’t feel sorry for these people one bit?
‘But we are in market conditions that nobody could have foreseen.’
Gimme a MF break. The only people who didn’t see this coming are the same people who contributed to current market conditions.
I am a software engineer with no real knowledge of financial markets at all, apart from a morbid curiosity concerning the current state of affairs and I along with many other on this blog and others like it saw this coming. The so called “experts” all had their hands in the till.
Is WaMu the Next Countrywide?
http://www.thestreet.com/s/is-wamu-the-next-countrywide/newsanalysis/ratings/10375529.html
It was never true that “Seattle is special, and won’t get affected by the housing bust”, but WaMu having significant troubles may disillusion some of the remaining housing bulls here. Their headquarters is in Seattle, and they are a major employer here. I wonder when we’ll start seeing layoffs?
Really good info on this link.
All of you who are looking for the “safest” banks. Here’s the list on the link.
Looks to me like Wachovia is in a lot better shape than I thought.
Lehman to shut down subprime business
“Lehman Brothers plans to shut down its subprime mortgage origination business, BNC Mortgage, slicing 1,200 jobs and at least temporarily exiting a business that has been highly profitable in recent years for Lehman and other Wall Street banks.
“The move came as Accredited Home Lenders and HSBC announced a combined loss of more than 2,000 US jobs as the collapse in the US subprime home lending market gathered pace.”
Bank of America receives permission to buy LaSalle from ABN Amro - 11,000 layoffs at LaSalle projected.
“Mortgage investors increasingly question the underlying value of mortgage-backed securities given that originator’s’ lax lending standards which led to a jump in defaults. Also, many economists expect weak home prices to drop further.”
“‘Investors believe the collateral has been impaired since they expect home prices to decline materially over the next year,’ the note said.”
Here in lies the crux of the matter. Who gave these dam investors the idea that home prices would fall? Not the NAR. Why aren’t they listening to the NAR? Those stupid investors. They actually believe that the underlying assets will fall further than forecast, on top of all the foreclosures. Stupid investors.
Mike, you’ve just hit the bullseye that the Fed and the rate cut bulls are missing. The mortgage investors are basically like ordinary folk who have glimpsed the emperor’s nakedness and can see that he is not exactly well endowed. No amount of ingenuity by his tailors can erase the revelation from the mind of the people and that is the Fed’s position today. All the liquidity in world is not going to convince investors to buy the financial equivalent of toxic waste any more than a housewife will buy maggot infested meat from the local butcher because her husband has just got a raise.
It was Ben Jones and his persistent lies.
Without overstating the obvious, I would like just like to say that today’s great news of FM, Lehman, and Toll is really pouring more gas on the fire. At this point, WS has got to be reeling. FEAR is imminent! Despite the gains of the Dow, this is getting ugly real fast. Even I couldn’t imagine that this is unwinding this fast. Heck, if it hadn’t been for the FED injecting where it shouldn’t, the Dow would probably be at 9-10K and Doublewide would be bankrupt right now. Then again, the GDII might already be starting.
What is interesting is that the jig is up. Heck, someone started a rumor yesterday just to get Doublewide going again. Talk about life support!
We are def. entering some interesting economic times. Batton (sp?) down the hatches! Hide the women and children! Stay as far from cheap junky debt as possible. Pay cash or use the debit card. Use the CC only for rewards and payoff in full each month! Buy some PM and park that cash in other currencies and in the mattress. Best to have at least 12-18 months of emergency money in reserve.
We have seen the news. All the stats point toward numbers we haven’t seen since the GD. Protect yourselves and family, economically because CASH IS KING. If you don’t got it, it will cost you and ARM and a LEG to get.
While I was first reading this latest additon to the site, I was thinking something similar….that this problem is accelerating, and quickly. These aren’t rinky dink companies having problems and layoffs.
Any bets on when WCI files BK???
I’ll bet we’ll see a BK filing from CFC very soon..
Dan, you and I think so much alike, I can’t believe it. Man, I love you like a brother.
OCDan is the man! There is tons of CYA taking place behind the curtain right now, and I think the $2B loaned out by the Fed today is proof that things are going to get way worse than they currently are. OCDan for Governor of CA!
Dan
I live in sourthern Arizona, home of First Magnus. Your statements ring so true. The local fishwrap and T.V. have this lead story since it happened. The message coming out of this from my understanding, emploees notified by health carrier they no longer have insurance.Seemly many with no cushion of savings Employees were clueless as to what is going on around them Countrywide, etc or simply gullible beyond belief swallowing the lies told by management as recently as three days before they shutdown. Rumors of First Magnus checks bouncing around town. To think this is just the first inning.
desertfox
Opening kick off….
Everything in the last year has been pre-season. Lots of little guys running around trying to prove themselves, but the big guys mostly worried about not getting hurt. No one wanting to reveal too much of their playbook.
German hedge fund blowing up 4 weeks ago was the coin toss. Lots of people getting into position after that. (10% drop in stocks) The run on Countrywide last week was the kicker’s foot making contact with the ball. Lots of people running around. Fed cut was the receiver catching the ball. Now is the time that bodies start hitting the turf as they take each other down….
Eventually, there will be a whistle, a bit of calm as people position themselves again… some try to get off the field as other players are moved into the game. Then an event will hike the ball, and bodies start crashing again.
People that thought they were sitting this game out (pension funds and insurance companies that are making comments like Great Depression era house price declines required for us to get hurt) will find themselves on the field at the bottom of the pile.
Excellent play-by-play analysis!
Aaron Krowne bought Casey Serins IAmFacingForclosure site?
“What’s the new owner planning for the site? Aaron Krowne, an Emory University library researcher and veteran blogger, hopes to turn it into a credible information source for people dealing with foreclosures….”
Doesn’t he own Lender Implod-o-meter and Hedge Fund Implod-o-meter?
http://www.sacbee.com/103/story/337761.html
Yep. He bought it for somewhere between $20,000 and $50,000. Sweet deal, eh?
An interesting read from Jim Hightower about the subprime fiasco:
Set up special investment units within their banks to buy these risky mortgages from the lenders. Then the Wall Street behemoths consolidated this bulk debt, leveraged it into complex IOUs called “mortgage-backed securities,” and sold these packages to wealthy speculators around the world. This Rube Goldberg financial mechanism has shoved hundreds of billions of dollars of capital into the subprime market, fueling lenders’ enthusiasm for making even more of these shaky loans.
More than $2.28 trillion worth of ARMs are scheduled to explode to their higher interest rates between now and 2009. Two million families are expected to have the wrenching experience of losing their homes, as well as losing all the money they invested in them.
All of this is working its way up the economic chain. More than 80 lenders have gone out of business in the past six months, thousands of jobs are being cut, and hundreds of thousands of houses are being dumped on an already-saturated market.
http://www.alternet.org/story/60183/
So, four more banks borrow $1/2BIL from the Fed, and the market takes it very well. See? No liquidity crisis at all! Yeah right. Where is Neil today?
Pop Gotcorn?
(Damn, I just can’t do like Neil)
“A” for effort.
“We’ve got assets that are not very moveable for the moment”
Translation:
We got suckered into buying a bunch of worthless paper.
Or “nobody will pay us a freakin’ dime for this s**t.”
And no one ever will.
Not quite accurate… No one will pay us more than $.95 on the dollar for the 76% if the waste that is AAA reted, and we need at least $.98 or the entire financial system simply stops…. At $.95 or less, NO ONE can meet margin calls and NO ONE can repay the loans that they used this toxic waste as colatteral for.
Isn’t the result pretty much the same???
here’s something to consider…the current housing prices are so inflated by lending manipulatation…that the potential home buyer with 20% down payment money is not merely a “bargain hunter” when he considers price…but rather a survivalist…if he drops 20% on a house he could be “underwater” in 6 months…banks realize this, too…this is bad!
If this RE downturn is so bad and all the consumers are going to be tapped out, why is Wall Street shrugging this off?
La Investor Girl,
The stock market is trading and has been trading to the EuroYen ‘Carry Trade’ ; contrary to the market pundits this market only has come back 10% and has now had a nice rally 150.05 - 156.09 - surprise this leads the US stock market by ~ 6hrs. The EuroYen trade is an interest rate play. Borrow moneys in Japan, convert to Euros buy British Gilts use British gilts as margin to buy US stocks. pocket the 12% interest.
Since the market turmoil of two weeks ago when the panic was to get out of Euros and into the Yen, Japan got whacked and in the meetings that would have assured of an interest rate increase this month, Japan has delayed the increase until September at the earliest.
The Interest rate play EuroYen vs S&P500 has no basis in fundamentals of companies. It is interest arbitrage.
graph of EuroYen vs S&P500 for 90 days
http://tinyurl.com/2lvgnp
Jesus…that sounds like too much work.
LOL
Its is little black box, buy sell - not fancy just an interest rate arb. The current Sharp’s ratio is 1.27 which is very good. Every solvent Hedge Fund will be looking at doing this.
From a small traders view, I trade the EuroYen and not the stocks. I am short US stocks. I try to stay long the Yen. The reason is that even with a lot of EuroYen liquidation in the last three weeks the Yen rallied 10%. Only 15% of the EuroYen was liquidated. The last time the ‘carry trade’ came undone, the Yen rallied 30%. It will come undone again. The Yen is stlll the most undervalued currency in the world that is traded.
Thanks for the explanation, Hoz….that helps a little. So are you saying it’s merely computer driven, a la the little black box, you don’t figure this all out on your own?? Learn, watch and click??
Just curious, you aren’t one of those “Foreign Exchange made easy” students, are you?? Do you trade this stuff just sitting at home?? I thought it would be fun to get to that point someday.
that’s so interesting…are any of the even marginally msm-sources telling us about this? the ones I’ve looked at seem to be saying it’s all just shrugged off risk worries, which would really signal psychosis it seems to me, so I much prefer the carry-trade story (not that I fully understand it, but don’t doubt that if there’s a way to play any possible angle to make a couple bucks it will be played)…
Obviously this can’t be correct. All housing is local.
“While Cerberus Capital Management LP has agreed to buy Option One, the sale may be delayed from October to December. Hedge fund manager Richard Breeden is pressing H&R Block to ’stop the bleeding’ and shut the money-losing unit.”
Cerberus seems to always be lurking in the wings, prepared to snap up failing companies at fire sale prices…
Please sign the petition and pass it on to those you know. The more people that know about this and are aware of what is going on, the better. Please pass this on to others via email and blogs.
http://www.petitiononline.com/bailout/petition.html
I now have close to 500 signatures and I started this just last night. While it does not have quite the impact of going door to door, we can get more signatures this way covering a much wider area. Please pass it on to others who do not visit this blog via email and by posting on other blogs, reddit, digg etc : ).
Tom
I really admire your efforts regarding the petition but I just have to tell you that the petition is only effective as the person to whom it is addressed any moral compass to care.
99% of decision makers dont care a whit about that which does not directly affect their lives. The remaing 1% care but dont dare rock the boat.
May I suggest doing something with more leverage, like taking some discreet photos of a mistress in a motel, or a freezer full of cash, something along those lines . . . ?!
rock on Tom
LOL sure, I could do that .
Got you up to 519, Tom. Good work!
Ok, I got inspired by yer work, Tom, and have the ultimate attn getter for yer pettition:
Add an ” occupation ” area next to the name. fill em in with things like ‘ Tiny Lester ; Bouncer. Dmitry Vilokov; Investor . Vito Corleone; Olive Oil Importer. Mike “Mad Dog” Jones; Cage Fighter. Mori Yakuzatomi; Investor. Harry Callahan; Inspector … and so on.
Heh heh
LOL! I was trying to edit and I couldn’t see how.
Anyways, it is over 540 now.
Looks like your getting close to 1 per minute and a half. This could really gather steam! Just sign it people! A revolution has to start SOMEWHERE! Started in our minds and hearts, then we all found a medium, Ben’s blog. Now, we can actually put our names on something, quit being anonymous, and finally voice our opinion to people that rely on our votes! I called Dodd’s office yesterday to tell them no increase for Fannie, no bailout. Did you?
Well Chad
. . . took yer suggestion & called. next thing I knew I was on-hold with Prozac commercials playing, then someone said ” no one is available to take your call at this time. Please leave a detailed message for the DHS, including your name, address, SS#, VIN & Registration and someone will land on your roof in a black helicopter to toss out your bags of cash as soon as possible.”
In all seriousness, you guys do have my support.
“and someone will land on your roof in a black helicopter to toss out your bags of cash as soon as possible.”
LOL. Gal picked up the phone right away yesterday. Maybe they are being swamped today?
I signed too Tom.
FYI …mikey is just the pseudonym I use on Ben’s blog and blonde Delta stewardesses
Amen, Aqius… But I’m afraid it’s gonna take a Revolution to change anything. We could change things peacefully through the election process, but 40% of the people vote for Republican incumbents each election, and another 40% vote for Democratic incumbents. And so the song remains the same.
Therefore, I have decided to form a militia. Wanna join?
What will be your strategy?
With a force of 6 or 8, we will storm the offices of the Joint Chiefs of Staff and unveil our plan. We will offer each one a $10 million annual salary and give them the position of co-Chairmen of the Board for our new government. We will then convince them to recall all our troops, surround Washington D.C., and carry out a non-violent coup. All current elected officials and political designees would be politely asked to gather up their shit and go home. We would then bring Warren Buffet in to re-organize our government into a well-oiled machine. Next, we convince smart, compassionate people to run for office. Terms would be limited to 6 or 8 years. Money would be eliminated from the entire process. TV stations would be forced to carry live open debates and/or town hall meetings. No advertising allowed. Lobbyists and Special Interest Groups would be shot on sight.
PALMETTO FOR PRESIDENT!
“..We would then bring Warren Buffet in to re-organize our government into a well-oiled machine”
The first law proposed …will be that only “Duracell” batteries are patriotic and Gov’t contracts must specify this in their order contracts.
Got GEICO?
tee hee… I like you already, hwy50.
…wanna join the militia?
I’m game. But let’s not Make Revolution for the Hell of It.
Sweeney
A militia eh? Hmmm, shades of Minute Men marching on Concord.
We need a galvanizing event to get the revolution going, but sign me up in the meantime, as long as I’m home by 9pm to take out the garbage.
I think the country has a pretty good system but it’s just gotten so damn corrupted by all the special interests, that the average person cant get fair deal. The politicians know better than to openly endorse corruption, like the South American/ African / Indian / Asian .. .hell pretty much the rest of the world, because US citizens still have the right & ability to bear arms.
for now
“… we need a galvanizing event to get the Revolution going…”
I’d say that the coming desperation of the middle and lower classes in this country should do the trick.
how organized could you get before the feds come knocking on your door and arrest you as a terrorist?
It seems like this war on terror was just a foundation to establish the idea that our “government” is our country instead of our “people” is our country. With that established, they now have a clear and direct means to “protect the government” from “terrorists”. Now they are free to take what ever “government” actions they wish.
Ron Paul Revolution is my last hope for a peaceful revolution.
I heard somewhere that that Revolutionary War was originally started by less than 5% of the population and didn’t become popular until they were winning. So, there may be hope.
Also,
1/3 of the populace was for the British, 1/3 for the revolution and 1/3 didn’t care either way. Almost what we have today.
I’ll post this petition over on the Ron Paul Forums. They have a great disdain for the Privately Owned Federal Reserve Bank Corporation.
http://www.ronpaulforums.com
Excellent, Mike.
Secession Now!